self-help law: November 2007 Archives

November 16, 2007

You Can Fight Your Foreclosure and Win

On November 15, 2007, an article in the New York Times, written by Gretchen Morgenson, reported that an Ohio Federal District Court refused to approve of 14 foreclosures because the company filing the cases couldn't prove that they were the owners of the mortgage. Since the federal courts won't hear cases brought by parties that have no interest in the case, the court dismissed the case without prejudice, meaning the company seeking the foreclosures could take their case to state court.

Mortgages today: Often no papertrail. The reason the company bringing the case couldn't prove ownership arises out of how mortgages are treated these days. After the mortgagor (the borrower) signs the paperwork, the mortgage is frequently sold (assigned) over the computer to a wall street investment firm --which proceeds to divide the mortgage into different "packages" which are resold as "securitized debt" investments. All of these sales and resales occur electronically. As a result, there isn't any papertrail.

Mortgage servicers often cannot prove the right to foreclosure. When the time comes to foreclose on a property, the foreclosure is brought by a "servicing company" (for instance, Countrywide). In roughly 40% of foreclosures, the servicing company is unable to produce a paper trail that ties it to the original mortgage owner. And without an adequate paper trail, the servicing company cannot prove that it has a right to pursue the foreclosure.

What the judge said. In the district court case, the judge pointed out that foreclosures typically go unchallenged. Here are the judge's words (in footnote 3) in response to the argument that the foreclosures should be allowed to continue:

"Plaintiff's, 'Judge, you just don't understand how things work,' argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled and still control, the foreclosure process. Typically, the homeowner who finds himself/herself in financial straits, fails to make the required mortgage payments and faces a foreclosure suit, and is not interested in testing state or federal jurisdictional requirements, either pro se or through counsel."

Judicial foreclosures: Consider an "inadequate paperwork" challenge. In about half the states (mostly in the Eastern half of the U.S.), foreclosures must proceed through a state court (unlike this district court case, which is unusual). In those state court foreclosures (called "judicial foreclosures"), the homeowner should consider challenging the foreclosure on the basis of inadequate paperwork. Although challenges of this type will benefit from legal representation, it is also possible to assert your rights as a self-represented person and ask the judge to rule on the adequecy of the paperwork.

Non-judicial foreclosures: Tougher to challenge. In the other states--mostly in the West and including California -- foreclosures proceed outside of court ("non-judicial foreclosures"). In these cases, your only option for stopping the foreclosure is to proactively seek an injunction in state court. This typically involves filing a complaint, a motion for a preliminary and permanent injunction, and a temporary restraining order. This is difficult to do without a lawyer unless you can find the requisite forms online or in a law library, and you have the grit to take the law into your own jaw.

Whether you are dealing with a judicial (court) or non-judicial (outside of court) foreclosure, a good place to start if you plan to fight the foreclosure is Represent Yourself in Court, by Paul Bergman and Sara J. Berman-Barrett (Nolo).

November 1, 2007

Self-Help Law Comes of Age

Once upon a time, in nineteenth century America, a perennial best seller was Every Man His Own Lawyer, by John G. Wells. By the time the twentieth century rolled around the lawyers had taken over and the very idea of handling one's own case in court was decried as a foolish and dangerous act -- as in "he who represents himself has a fool for a lawyer."

In 1971, Nolo Press published the first edition of How to Do Your Own Divorce in California, now in its 30th edition. After a rocky start, the Sacramento Bar Association put Nolo on the map by warning would-be consumers against using a book to do their divorce -- as in "doing your own divorce is like doing your own brain surgery."

Well, not quite. The attack alerted the public to the existence of an alternative to hiring a lawyer and the book flew off the shelves. Even then lawyers had priced themselves out of the vast market of working men and women, many charging in excess of $100 an hour .

While there were a few other self-help law publishing precedents -- How to Avoid Probate, by Norman Dacey comes to mind -- only Nolo Press in Berkeley, led by owners Ralph Warner and Toni Ihara, went on to create a publishing firm dedicated to self-help law. In my humble opinion, the Nolo Press imprint is one of the great law-related inventions of the twentieth century and it was--and is--a great privilege to be a part of it.

As the idea of self-help law grew through Nolo's publications on wide variety of legal subjects, so did the imaginations of court innovators. In the early 1990s, the Maricopa County Superior Court (think Phoenix) opened up the nation's first courthouse self-help law center, an entire floor of the courthouse dedicated to people handling their own family law cases. Over the next several years, court administrators and presiding judges from all over the country were invited to the Center to attend two- day trainings on how to create self-help law centers.

Today, the result is clear. Virtually all states now have self-help law centers in some or all of their courts. And an entire page of one website dedicated to lawyers and court officials who want to further the self-help law movement lists a dizzying variety of resources addressed to the needs of the self-represented litigant.

We can now see the day when courts will be as comfortable servicing self-represented litigants as they are servicing lawyers. While this will be a huge jump forward, there will still be the artifacts of the past that will have to be dealt with--such as unnecessarily complex rules of court and appellate practice, unauthorized practice of law barriers against skilled paralegal practice, and a court system that favors litigation over mediation and conciliation.